- Lira drops to a record low of 7.2023 per US dollar.
- Turkey’s forex reserves slide to $25 billion from $400 billion.
Turkey’s Lira (TRY) continues to lose ground with analysts raising concerns regarding the nation’s declining reserves and its limited ability to defend the currency.
At press time, TRY is trading at a record low of 7.2023 per US dollar. The previous lifetime low of 7.0831 per US dollar was registered in August 2018.
The currency has dropped by over 15% so far this year and Turkey’s reserves have fallen to near $25 billion from $40 billion, according to Aljazeera news report. The situation looks grim if we take into account the fact that Turkey faces over $150 billion worth of external debt cost in 2020.
Turkish Finance Minister Berat Albayrak told investors on Wednesday downplayed concerns regarding the country’s depleting exchange reserve, but so far his assurances have failed to put a floor under the Lira.
The sell-off may stall if Turkey gets a dollar swap line from the Federal Reserve. Turkish authorities have reached out to the Fed and other central banks, but so far, no deal has been announced.